Immigration and Social Security

I’d like to discuss the the ratio of Social Security recipients to contributing workers. In 1940 the ratio of working age adults to retired beneficiaries was just under 160. As of 2013 that number is just under 3 (2.8 to be exact), and that number has been trending down for a long time. This can be attributed to two direct causes: 1) Currently there are roughly 49 million Americans over the age of 65, and that number is expected to double by 2040. 2) The national birth rate is at an all time low with just 62 children born per 1,000 women in 2016; down 1% from the previous lowest rate in 2015.

So how do we fix this downward trend and make sure social security is available in the future for the people who have paid into it? Do we incentivize increasing the birth rate? Maybe, but even if the rate were drastically increased it would be approximately 18-25 years before new births start contributing to the system, and by that time the number of people over 65 will have doubled as stated above.

I suggest America do an about face on its current stance on immigration and begin welcoming immigrants and streamlining the path to citizenship. This would increase the number of working age citizens as more than 85% of immigrants are under 65. I feel there are of course many more social and economic benefits to increased immigration and granting easier citizenship, but I will limit the opening post to the scope I laid out above.

What do you guys think?

 

All of us collecting from it paid the money into it ourselves.

Why isn't the money there?

 

How does importing millions more 3rd world immigrants, who use more in welfare than they pay in, going to save social security?

And how long before they decide they’re simply not going to pay into a system that redistributes their money to elderly whites (who many people are hoping die off soon)?

 

Importing zillions of uneducated and unskilled people who will immediately go on welfare is a disaster.

Immigration worked in the past because the USA limited it to people who would benefit the USA (they had skills, were educated), and who would not need welfare. In fact, immigrants were not allowed to receive govt welfare until they were citizens. And becoming a citizen was not automatic.

And you have the huge problem that immigration has become a tool of "progressives" to change the electorate.

So, absolutely NO to your suggestion.

Social security is a failure, its a ponzi scheme, and for decades people have known it was going to fail.

You want to solve the SS problem? End social security. Phase it out. Say everyone over 65 who makes more than $100,000 a year will not receive SS. Everyone under 50 will not receive SS at all. Make SS a "non-profit", tax just enough to cover the expenses. Is it fair that all those people paid in and will get nothing? No, its not fair. But that's just too bad. Its better than keeping SS and facing the huge debt and disaster that will have far greater consequences.

 

You get paid Social Security relative to how much you have paid in over your best 35 years of employment.Without Social Security we will have millions upon millions homeless in our streets,crime will go through the roof.

 

Because the dollar you paid while working isn’t the dollar paid back to you when you retire. The money paid into social security today goes to those collecting today. There are more people collecting than ever before and the percent of workers to retirees is lower than it ever has been.

According to the Center for Law and Social Policy immigrants receive a much smaller percent of welfare dollars than native born citizens. As for your second point, they will pay into it because A) They have to, just the same as you and I, B) They will be given the opportunity to revieve it when they retire, just the same as you and I.

 

You’re painting with a rather broad brush here. As I’ve already stated CLASP finds that immigrants use a much smaller percentage of welfare dollars than native born citizens. Immigrants were found to use subsidized school lunches far more than any of the other programs which cost much more such as housing and cash based welfare.

Many immigrants are skilled workers, a large percent are proficient in technology based industries, but aside from that America has a large need for unskilled and physical labor that isn’t currently met by native citizens. There are plenty of jobs for immigrants and an increase in population increases demand for goods and services, so even more jobs are created.

As for your argument that Social Security should be canned, this topic is about making the program sustainable.

 

The claim that immigrants use less welfare than USA citizens is not accepted. There are plenty of studies refuting the CLASP claim, search the internet on the issue.

I looked up CLASP and read its financial report, its board is full of "progressives". Its funding comes from "progressive" organizations, some such as the Joyce Foundation are radical far, far left. It has close ties with the Center for American Progress, a political "progressive" mouthpiece.

I did not recognize any conservative members or supporters or funders of CLASP.

CLASP is a politically biased organization. So I reject it as a reliable source.

..."America has a large need for unskilled and physical labor that isn’t currently met by native citizens.".....

False. I live in an agricultural area. There used to be a lot of illegals, people claimed that they were needed because Americans wouldn't do the hard labor. Through peer pressure, almost nobody uses illegals anymore, not in construction or farming. Americans do the work, nobody went out of business. Except the Spanish speaking churches who catered to illegals, they are gone.

My neighbor has a house at the back of his property, he had 3 illegals live there. He stopped using illegals and replaced them with one man who has now been working for him for 3 years. He does better work than the illegals, is more skilled, and is a better deal financially.

It cannot be made sustainable. Its a looming disaster.

 

Would you care to provide me with the names of organizations with published material on the topic that you do find credible?

I appreciate that your experience is valuable to you in informing your opinion, but it is anecdotal at best and as such it adds little to the discussion.

Well this discussion is about making it sustainable. For sake of discussion; assuming you could propose any situation that might improve the situation, what might it be?

 

I am a legal immigrant on a green card. The rule is that I have to pay into SS for 10 years before I can receive benefits. Therefore, any legal immigrant who works in the US, but leaves before the 10 years are over, has subsidized the SS system.

As far as illegal aliens go, my understanding is that they are not eligible for welfare and Medicaid. Of course, they do pay taxes whenever they buy stuff.

 

I believe your situation is an excellent illistration of my point. Your immigration status is financially beneficial to you, I would hope, and your situation increases the number of working age adults in the country. You pay taxes and social security, you fill a need in your field of expertise, and your presence increases the demand for goods and services. Hard to find a downside.

I know there are some instances of undocumented immigrants accessing welfare programs such as Medicaid, but that is limited to reimbursement to hospitals for emergency care for undocumented immigrants; the majority being maternity care. The only programs I know if that illegals can access reliably are food services such as reduced or free school lunches. I think that’s fine though. “The Greatest Nation on Earth” shouldn’t have people starving in it regardless of your opinion of their status.

 

A relevant request, but not one that I am interested in addressing. Why? Because its a highly political issue for both sides, and I don't want to spend the time required to wade through numerous studies trying to determine which are objective and which are political propaganda.

From my earlier look at CLASP, I read a few summaries from various studies. The pro-immigrant ones tend to focus on federal welfare and claim illegals are technically ineligible for federal help - but they do receive federal help directly and indirectly - and they do not seriously address the support provided by state and local govt welfare programs. The result is a biased conclusion.

This seemed to be a decent study, https://cis.org/sites/default/files/camarota-welfare-illegals_1.pdf
CIS is sometimes touted as anti-immigrant, but its study appears objective. For example, it points out education level seems to be more correlated to welfare use than legal status.

And my anecdotal evidence counters your unfounded statement that illegals are required because Americans will not do certain types of labor.

If you are going reject anecdotal evidence, then if you want to remain honest you cannot present anecdotal evidence or pure opinion in your argument.

SS supporters present 2 solutions: increased taxation; immigration. The fundamental problem is that taxation income has to pay benefits, but the USA is heading to roughly 2 people working for every 1 SS recipient. You have to have enough workers to comfortably support the SS recipients.

Using round numbers, the current average SS retirement check is $1400 a month, split between 2 workers each worker must pay $8400 a year to support that SS recipient. Average income is $50,000 - the avg worker will pay 16% of their income to SS.

People wont stand for 16% SS tax on their gross income, so increased taxation is a total dud. And taxation on just the "rich" wont do it either because the "rich" don't make that much income. That "1%" is very wealthy, wealth is not income. The huge block of income is in the middle class. Check the IRS data on the IRS website.

Are you going to tax wealth instead of income? Setting aside the legal and moral and economic arguements against it, no way that will ever pass the politicians.

That leaves immigration. Just to lower the 16% to 8% requires a doubling of the taxed income, that requires a rapid more than doubling of the population of the USA since immigrants typically earn less than the average. Double the USA population? Just destroy the USA entirely.

Immigration wont work, increased taxation wont work. Social Security is a Ponzi scheme, and Ponzi schemes always fail.

 

Republicans have been saying almost the exact same thing for almost 100 years.

When will they understand that they are wrong?

We currently have enough money in the SSI Trust fund to pay full benefits with NO changes until `2037. AT that point there is enough for 75%.

The remaining 25% can be made up simply by raising the cap at which SSI payroll taxes are not drawn. Currently that's about $110K. No SSI tax is paid on any money over that.

Raise that cap to $250K and that 25% is made up and SSI is solvent as far as the eye can see.

Also...the biggest "burden" on the Trust Fund are the Baby Boomers. By 2037...most of them will be gone

 

Wrong.

Read the Social Security report.

The "trust fund" will be depleted by 2035. After the mythical lockbox is depleted, all benefits paid by SS will come completely from taxation.

Your solution of simply raising the taxation cap is wrong. The SS admin claims keeping SS solvent may require reducing the COLA, reducing benefits, increasing taxation, raising the cap, raising the age of eligibility (the retirement age).

 

So you're main complaint here is a quibble over whether it's 2035 or 237 when the Trust Fund is exhausted and we ae short that easily replaced 25%?

Newsflash...SSI has ALWAYS been funded by taxation

 

From the Atlantic

Answer
If getting rid of the earnings cap would keep Social Security fully funded, politicians should just do that.

Question
But will enough politicians get on board?

As wealthy Americans continue to get wealthier, a bigger share of their wages is escaping the Social Security tax. So, one proposed solution is to get rid of the cap and keep the 12.4 percent payroll tax rate, which would mean an estimated $100 billion more taxes a year for the wealthy, who currently pay a smaller proportion of their income into Social Security compared with poorer families. Simply put, this would close the current funding gap.

There are, of course, critics against raising the cap, because having a higher cap (or getting rid of it) means that the top earners in the country will pay more into Social Security. Conservatives opposed to raising taxes hold the same argument for Social Security taxes, namely that eliminating the cap would hurt GDP and economic growth generally and that wealthy Americans are already paying more income taxes. Others argue that this means in the future when those high earners retire, simply getting rid of the cap wouldn’t completely solve the problem.

 

Question: How much revenue would come into the Social Security Trust Fund each year and how far out would Social Security solvency be extended if the payroll cap were to be eliminated?

Paul Solman: I’ve just gone back to a story we did on this very subject back in 2005 with Columbia finance professor Stephen Zeldes, “Raising Tax Cap Explored as Way to Close Social Security Gap,” and here’s what I reported at the time:

“Removing the cap entirely, thereby imposing a flat tax of 12.4 percent on all earnings — essentially a $100 billion a year tax increase on the wealthy — would more than completely close the funding gap.”

More recently (Septempter 2010), here’s what Janemarie Mulvey wrote in a report for the Congressional Research Service:

“If all earnings were subject to the payroll tax, but the base was retained for benefit calculations, the Social Security Trust Funds would remain solvent for the next 75 years.”

For those readers who don’t fully grasp the question, or my answer, here’s Ms. Mulvey’s statement of the problem, upon which I can’t much improve:

 

Most of us (who make less than $120K) pay SSI on every penny we make.

The wealthy pay only on the amount up to $120K.

 

You don't fix a ponzi scheme by jamming more people into it. That just puts off the inevitable.

 

Ponzi scheme's don't last 100 years

 

Social Security has always been funded by taxation, but for many years the tax revenue was able to fund expenses and produce a surplus of funds. That was intentional, the surplus created the "lock box" which was a financial fund which would accrue interest and pay the increasing costs of social security without having to raise additional tax revenue. The demographics of the nation have been known since social security was created. It has always been known that the proportion of people who would receive benefits would increase.

The "lock box" will be empty by 2035 or earlier. There will be no investment income or principle to offset the costs. All costs will have to be paid for with current year tax revenue.

And that's why it will fail (see my previous post).

 

And raising the cap at which payroll taxes are taking out would fix this problem.Currently any money earned over $120K does not have SSI tax taken out.

You and I pay that tax on every penny we earn. The rich do not

 

I repeat

 

Heh, they do when participation is mandatory!

 

Nonsense.

But you do illustrate the fact that the GOP is invested in destroying SOcial Security...and has been from the beginning